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Uncertainty handicaps Israeli gas

Aug. 3, 2012 at 6:16 AM

TEL AVIV, Israel, Aug. 3 (UPI) -- Regulatory uncertainty and national security concerns in Israel might leave some of the richest offshore natural gas reserves untapped, authorities said.

Delek Group and Noble Energy are among the major offshore players in the Israeli natural gas sector. Together, they've discovered enough natural gas in the Israeli waters of the Mediterranean Sea to last the country 150 years.

Nick Maden, an exploration director at Statoil, said there has been more natural gas discovered off Israel's coast than can be commercialized.

"I'd be surprised if some of the gas in Israel isn't stranded," Maden told Bloomberg News.

Environmental concerns and a lack of available land are hindering Israel's ability to build a liquefied natural gas plant to export the reserves. Noble said an LNG facility could cost as much as $5 billion and any offshore facility would be a national security concern.

Giora Eiland, a former general and national security analyst at Tel Aviv University, told Bloomberg the security threat to Israel's gas "is serious."

A government committee report on natural gas development is due this month. Delek officials, however, said in July that foreign investors are reluctant to wade into Israeli waters "because of the regulatory uncertainty."

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